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EZCORP Announces 66% Earnings Growth for First Quarter

Jan 20, 2005

EZCORP, Inc. (NASDAQ: EZPW) announced today results for its fiscal first quarter, which ended December 31, 2004.

For the quarter ended December 31, 2004, EZCORP's net income improved sixty-six percent to $4,949,000 (thirty-seven cents per share) compared to $2,990,000 (twenty-three cents per share) for the 2004 first fiscal quarter. Total revenues for the quarter increased thirteen percent over the prior year period to $61,628,000 with sales, pawn loan and payday loan revenues up eight, seven and seventy-one percent respectively.

During the quarter, the Company sold a portfolio of old payday loan bad debt for approximately $905,000. Excluding the benefit of this sale, net income for the quarter would have increased forty-six percent to $4,370,000 (thirty-three cents per share).

Commenting on these results, President and Chief Executive Officer, Joe Rotunda, stated, "The quarter was an excellent start to our 2005 fiscal year. Earnings were strong and exceeded our previously announced guidance. The earnings growth was driven by year over year increases in sales and lending revenues and improvements in our payday loan collections. For the quarter, our net defaults measured as a percent of loans made during the quarter improved to 4.9%, excluding the sale of old bad debt, compared to 5.6% for the same period a year ago.

Rotunda continued, "During the quarter, we opened forty EZMoney Payday Loans locations bringing our total store fronts, including our 280 EZPawns, to 445. We are on track with our expectation to open 120 to 140 EZMoney locations this fiscal year.

Rotunda concluded, "We expect our second quarter earnings to be in the range of twenty-seven to thirty cents per share compared to twenty-three cents for the fiscal 2004 second quarter. For our 2005 fiscal year, we are raising our guidance to $1.00 to $1.05 per share compared to earlier guidance of ninety to ninety-five cents and fiscal 2004's seventy cents per share."

EZCORP meets the short-term cash needs of the cash and credit constrained consumer by offering convenient, non-recourse loans collateralized by tangible personal property, commonly known as pawn loans, and short-term non- collateralized loans, often referred to as payday loans. The Company also sells merchandise, primarily collateral forfeited from its pawn lending operations, to consumers looking for good value. As of December 31, 2004, the Company operated 280 EZPAWN and 165 EZMONEY Payday Loans locations, 128 of which adjoin an EZPAWN location.

This announcement contains certain forward-looking statements regarding the Company's expected performance for future periods including, but not limited to, new store expansion and expected future earnings. Actual results for these periods may materially differ from these statements. Such forward- looking statements involve risks and uncertainties such as changing market conditions in the overall economy and the industry, consumer demand for the Company's services and merchandise, changes in regulatory environment, and other factors periodically discussed in the Company's annual, quarterly and other reports filed with the Securities and Exchange Commission.

You are invited to listen to a conference call discussing these results on January 20, 2005 at 3:30pm Central Standard Time. The conference call can be accessed over the Internet (or replay it at your convenience) at the following address.

http://phx.corporate-ir.net/playerlink.zhtml?c=69434&s=wm&e=997984

For additional information, contact Investor Relations at (512) 314-2220 or Dan Tonissen at (512) 314-2289.

                                 EZCORP, Inc.
       Highlights of Consolidated Statements of Operations (Unaudited)
                    (in thousands, except per share data)

                                         Three Months Ended December 31,
                                               2004          2003
  1 Revenues:
  2    Merchandise sales                     $32,018       $31,062
  3    Jewelry scrapping sales                 4,306         2,493
  4    Pawn service charges                   16,669        15,552
  5    Payday loan service charges             8,290         4,861
  6    Other                                     345           346
  7       Total revenues                      61,628        54,314
  8 Cost of goods sold:
  9    Cost of merchandise sales              18,780        17,583
  10   Cost of jewelry scrapping sales         3,133         1,690
  11      Total cost of goods sold            21,913        19,273
  12 Net revenues                             39,715        35,041
  13
  14 Operations expense                       22,703        20,777
  15 Bad debt and other payday loan
      direct expenses                          1,609         1,839
  16 Administrative expense                    5,867         5,862
  17 Depreciation and amortization             1,887         1,915
  18   Operating income                        7,649         4,648
  19
  20 Interest expense, net                       339           448
  21 Equity in net income of unconsolidated
      affiliate                                 (460)         (365)
  22 Loss on sale/disposal of assets              37           ---
  23 Income before income taxes                7,733         4,565
  24 Income tax expense                        2,784         1,575
  25 Net income                              $ 4,949       $ 2,990
  26
  27 Net income per share, assuming dilution $  0.37       $  0.23
  28
  29 Weighted average shares - assuming
      dilution                                13,237        12,847



                                 EZCORP, Inc.
            Highlights of Consolidated Balance Sheets (Unaudited)
            (in thousands, except per share data and store counts)

                                               As of December 31,
                                               2004          2003
  1 Assets:
  2   Current assets:
  3     Cash and cash equivalents           $  3,115      $  1,402
  4     Pawn loans                            44,714        46,380
  5     Payday loans, net                      8,666         5,683
  6     Pawn service charges receivable, net   9,465         9,602
  7     Payday loan service charges
         receivable, net                       1,759         1,137
  8     Inventory, net                        32,317        32,527
  9     Deferred tax asset                     9,711         8,163
  10    Prepaid expenses and other assets      5,233         3,163
  11      Total current assets               114,980       108,057
  12  Investment in unconsolidated affiliate  16,527        15,144
  13  Property and equipment, net             26,049        24,701
  14  Deferred tax asset, non-current          4,946         4,391
  15  Other assets, net                        4,016         5,555
  16      Total assets                      $166,518      $157,848
  17 Liabilities and stockholders' equity:
  18  Current liabilities:
  19    Accounts payable and other
         accrued expenses                   $ 13,831      $  9,837
  20    Customer layaway deposits              1,686         1,675
  21    Federal income taxes payable           3,336         1,012
  22      Total current liabilities           18,853        12,524
  23
  24  Long-term debt                          22,000        32,450
  25  Deferred gains and other long-term
       liabilities                             3,868         4,229
  26      Total long-term liabilities         25,868        36,679
  27  Total stockholders' equity             121,797       108,645
  28      Total liabilities and
           stockholders' equity             $166,518      $157,848
  29
  30 Pawn loan balance per ending
      pawn store                            $    160      $    166
  31 Inventory per ending pawn store        $    115      $    116
  32 Book value per share                   $   9.85      $   8.91
  33 Tangible book value per share          $   9.64      $   8.70
  34 Pawn store count - end of period            280           280
  35 Mono-line payday loan store count
      - end of period                            165            23
  36 Shares outstanding - end of period       12,365        12,188

SOURCE: EZCORP, Inc.

CONTACT: Investor Relations, +1-512-314-2220, or Dan Tonissen,
+1-512-314-2289, both of EZCORP, Inc.

Web site: http://www.ezcorp.com/
http://phx.corporate-ir.net/playerlink.zhtml?c=69434&s=wm&e=997984

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